Will New York Tackle its Largest Source of Emissions?

Experts say the state needs to spend at least $1 billion a year to cut pollution from buildings. Legislators are trying to get the governor closer to that figure.

Colin Kinniburgh   ·   March 30, 2022
Climate advocates rallied outside of Gov. Hochul's Manhattan offices this week | Sue Brisk

Carole Resnick has been trying to get her home off fossil fuels for years. A retired psychologist, Resnick lives in Syracuse and makes a fixed income—a combination of New York state employee retirement and social security, which she says makes her “pretty solidly middle class” by local standards. For both climate and health reasons, she has long wanted to swap out her gas-powered appliances for new, all-electric ones—but when she looked into making the switch, she hit a wall.

“I basically just can’t afford it,” she told New York Focus.

She’s had her home assessed multiple times, first to install solar panels on the roof, then to swap out an aging furnace for a heat pump. Each time, she ran into similar obstacles. Rebates and tax credits were hard to qualify for, and there were large hidden costs that they wouldn’t have covered even if she were able to qualify. To get solar panels, an assessor said she would first need to replace her roof; to switch over to a geothermal heat pump, she’d need to upgrade her furnace. All of these steps could add tens of thousands of dollars to the cost of the equipment itself.

“To tell me I’m going to break even in 30 years does me no good,” Resnick said.

Jessica Azulay, program director of the advocacy group Alliance for a Green Economy, says many people are in a similar position: they want to reduce their homes’ dependence on fossil fuels, and their utility bills in the process. But it takes a lot of groundwork—from upgrading electrical panels to removing toxins like lead and asbestos—and for many households, it’s just too expensive.

Overcoming these hurdles is key to meeting New York’s climate targets. Buildings are the state’s single largest source of carbon emissions, heating the planet and taking a severe toll on health. According to research published last year, pollution from New York’s buildings causes nearly 2,000 premature deaths a year, more than in any other state.

To begin addressing this problem, 1 to 2 million of New York’s 7.4 million homes need to be weatherized and electrified with heat pumps by 2030, according to the Climate Action Council. Governor Kathy Hochul has embraced this goal, saying the state will electrify 1 million homes and make another 1 million “electrification-ready” by 2030.

That will require a hefty amount of public funding. The climate council’s Energy Efficiency and Housing Advisory Panel estimated that New York needs to spend at least $1 billion per year to help low- and moderate-income households decarbonize their homes. This reflects a core mandate of the state’s 2019 climate law: that the state must not only decarbonize, but do so equitably.

The kind of funding needed to meet those targets is not on the table in state budget negotiations. But the governor, Assembly, and Senate have all proposed some funding for green retrofits, with the Senate’s one-house budget coming closest to the level the council advisory group says is needed. And budget negotiations could decide the fate of a slew of other measures designed to get fossil fuels out of buildings, including a gas ban for new construction.

So, with just a few days to go before the state’s March 31 budget deadline, what can New Yorkers expect in terms of addressing the state’s largest source of pollution?

‘Potemkin village’

On the retrofit side, Hochul’s opening offer is a $250 million slice of the state’s new five-year housing capital plan, aiming to fund weatherization and electrification of 50,000 homes. The Senate has kept this amount in its budget, while the Assembly has increased it to $350 million.

That would cover only a small fraction of Hochul’s stated goals for building decarbonization. The 50,000 homes targeted in the housing plan—which spans into 2027—represent just 5 percent of the 1 million homes she wants fully electrified by 2030. Asked for comment, the governor’s office did not elaborate on how the state plans to close that gap.

“They’re hyping up a big Potemkin village here,” said Pete Sikora, climate and inequality campaigns director at New York Communities for Change. “They’re acting like they’re proposing big stuff, but it’s empty on the funding side.”

Hochul’s proposal amounts to a $5,000 subsidy per home, to cover everything from adding insulation to swapping fossil-fuel boilers for heat pumps. Sikora points out that this covers less than half of the upfront costs of a full retrofit, which can range from $15,000 to 20,000.

The housing plan isn’t the only pot of money for building decarbonization. The governor has also proposed to expand the Environmental Bond Act from $3 billion to $4 billion, with $350 million set aside for green buildings projects over several years.

The legislature wants to go further: the Assembly is asking for $5 billion, including $850 million for green buildings, while the Senate is aiming for $6 billion, with a full $1 billion specifically dedicated to helping low- and moderate-income households electrify and weatherize their homes. Whatever amount is passed in the final budget, it also needs to be approved by voters in November.

Azulay, a leader of the Renewable Heat Now coalition, sees the Senate proposal as a promising first step—both because it’s the biggest and because it specifies that the funding should be targeted to the households that need it most.

The governor’s office referred a request for comment to the state energy agency, NYSERDA. A NYSERDA spokesperson highlighted the state’s existing programs to help people pay for energy efficiency upgrades, including free energy audits and income-targeted discounts on major upgrades. In many cases, utilities also shoulder some of the upfront costs of such upgrades, which ratepayers ultimately pay for through their electric bills.

Besides the housing plan and bond funding, the Senate and Assembly proposed a new $5,000 tax credit for geothermal heat pumps, and the Senate proposed expanding an existing solar tax credit from $5,000 to $10,000.

But even if all these programs passed, they wouldn’t be enough to spur the kind of transition needed to achieve the state’s climate goals.

“I think everyone agrees we’re behind where we want to be,” State Senator Liz Krueger, chair of the chamber’s finance committee, told New York Focus. “We’re hoping that our commitment to shift more funds into these items… will jumpstart things.”

Gas ban battle

Climate advocates stress that there are also critical steps the state can take to cut building emissions without increasing its budget, most notably banning gas in new construction. A New York state gas ban, if passed in the coming weeks, would be the first of its kind in the country.

Hochul has proposed a gas ban that would take effect in 2027. The Senate wants the state to move faster: Its version would phase in starting in 2024 for smaller buildings, while buildings seven stories and up would have until 2027, mirroring the policy passed in New York City in December.

The Assembly left the gas ban out of its proposed budget altogether, reflecting its insistence that policy issues without fiscal implications should be decided outside of budget negotiations. (A spokesperson for Assembly Speaker Carl Heastie did not respond to a request for comment.)

Assemblymember Emily Gallagher says the state can’t wait until 2027 to begin implementing a critical part of its climate agenda. Along with Senate Housing Committee Chair Brian Kavanagh, she is the lead sponsor of the All-Electric Buildings Act, the version of the gas ban included in the Senate’s budget proposal.

“We have a very limited window in which we can actually make a significant impact in CO2 reduction,” she told New York Focus. “We have put off the climate crisis for so long… that at this point, five more years really matters.”

New research by the green energy group RMI shows that the Senate’s version of the gas ban would triple the impact of New York City’s, saving an additional 4 million metric tons of CO2 by 2040—the equivalent of taking 870,000 cars off the road for a year. Amar Shah, who co-authored the research, told New York Focus that the state will likely add tens of thousands of homes by 2027, which under a slower timeline for a gas ban could be locked into fossil fuel use for decades to come.

Sikora, of New York Communities for Change, says another catch in Hochul’s version of the gas ban is that it charges a council of the governor’s own appointees with implementing the law “to the fullest extent feasible,” which could allow for significant carveouts.

“If what they pass is what’s literally in the governor’s budget, our expectation would be that it will be watered down to exactly the minimum of what is specified in the budget, which is no good,” Sikora said.

The Senate proposal, by contrast, directly mandates that no municipality could issue permits for a fossil-fueled building past the specified dates, unless a builder can prove that doing so would be physically impossible.

Flurry of lobbying

Fossil fuel interests, meanwhile, have devoted significant resources to blocking any kind of gas ban at all. Like the New York City ban before it, the state proposal has drawn the attention of the American Petroleum Institute (API), the largest national oil and gas trade group. In early March, the group launched dozens of targeted Facebook ads warning New Yorkers against a gas ban.

“We should decide what fuels our homes, not Albany,” one ad reads, in all caps. “Don’t let the government tell you what kind of appliances you can buy,” reads another.

The campaign is promoted by a front group, Energy Citizens, under the banner of “Home Heating Choice.” API has also spent at least $134,000 on lobbying since last July, state filings show, primarily targeting the city and state gas bans.

API says it wants to maintain a “diverse and reliable fuel mix” for New Yorkers. “We’re focused on educating interested New Yorkers about pending legislation that could restrict their ability to use natural gas for home heating and cooking, and offer an outlet for them to voice their concerns,” spokesperson Scott Lauermann told New York Focus.

For now, the gas ban is tied up in three-way negotiations between Hochul and the two houses of the legislature. So is one more related item: the “100-foot rule,” one of a slew of policies that quietly incentivize fossil fuels. The rule requires utilities to connect new customers to a gas line for free, provided they live within 100 feet of an existing main. In effect, climate advocates say, this amounts to a subsidy from ratepayers to fund expansions to the gas system.

That’s one area in which the governor appears to be going further than the legislature, at least for now: Hochul’s budget proposes to eliminate the requirement, but the proposal was dropped from both the Senate and Assembly budgets. Krueger and Assemblymember Patricia Fahy have sponsored a separate bill that would scrap the 100-foot rule as part of a broader set of measures to move the state off gas.

As with the gas ban, advocates are determined to push the bill through in the coming months even if it doesn’t make it into the final budget—and not only because of the climate. Spiking energy prices, which have led some New Yorkers’ utility bills to double or even triple in recent months, have only made it more urgent to cut our dependence on fossil fuels, advocates say.

“This is one of many wake-up calls that we’re getting, and why our reliance on extractive energy sources and volatile fuel is not good for us,” Azulay said. “We don’t have to live in this nightmare forever. We can switch.”

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Colin Kinniburgh is a reporter at New York Focus, covering the state’s climate and environmental politics. Over a decade in media, he has worked in print, television, audio, and online news, and participated in fellowship programs at CUNY’s Graduate School of Journalism and… more
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